Smart Buildings

Will SPACs Offer an Alternative Exit Route for Companies in the Smart Buildings Space?

This article was written by Daphne Tomlinson, Senior Research Associate at Memoori. In 2020, an alternative to a conventional IPO - Special Purpose Acquisition Companies (SPACs) - took the innovation landscape by storm, according to Michael Holman of Lux Research. “A SPAC is an alternative to a conventional initial public offering (IPO) in which an investor group takes a shell company public through its own IPO and then uses the proceeds from the IPO to acquire a private company, which now becomes the new publicly traded company. Investors essentially get to outsource their due diligence to the SPAC sponsor, and the private company gets to bypass the risk and indignities of an IPO roadshow and simply negotiate a price directly with the SPAC sponsor.” The popularity of SPACs has been noted by many financial commentators throughout this year and in the smart buildings space, we have seen several recent examples of companies announcing or considering […]

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This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.

In 2020, an alternative to a conventional IPO - Special Purpose Acquisition Companies (SPACs) - took the innovation landscape by storm, according to Michael Holman of Lux Research.

“A SPAC is an alternative to a conventional initial public offering (IPO) in which an investor group takes a shell company public through its own IPO and then uses the proceeds from the IPO to acquire a private company, which now becomes the new publicly traded company. Investors essentially get to outsource their due diligence to the SPAC sponsor, and the private company gets to bypass the risk and indignities of an IPO roadshow and simply negotiate a price directly with the SPAC sponsor.”

The popularity of SPACs has been noted by many financial commentators throughout this year and in the smart buildings space, we have seen several recent examples of companies announcing or considering public listings through this route.

In Q4 2020, View and Stem announced transactions and ecobee was reported to be considering this approach.

Stem

Stem, Inc. announced in December 2020 that it was to become publicly listed through a business combination with Star Peak Energy Transition Corp., a publicly-traded special purpose acquisition company.

Founded in 2009, Stem is an energy storage leader that offers customers a complete solution of integrated battery storage systems, network integration and battery optimization via its proprietary AI-driven software platform called Athena.

This listing, expected to close in the first quarter of 2021, will create the first public pure play smart energy storage company.

View

View, Inc., a Silicon Valley-based smart window company founded in 2006 and CF Finance Acquisition Corp. II, a special purpose acquisition company sponsored by Cantor Fitzgerald, announced in November 2020 they have entered into a definitive merger agreement. The combined company will be called View, Inc. and will be publicly listed on the NASDAQ market following the close of the transaction. In a deal that values the Bay Area-based business at $1.6 billion, the agreement will provide the combined company with $800 million in proceeds, including a $300 million PIPE investment.

View is the creator of dynamic glass and smart windows that use artificial intelligence and machine learning which will tint the glass to optimize natural light while controlling heat and glare to enhance mental and physical well-being for occupants, creating smart connected buildings which reduce energy consumption and greenhouse gas (GHG) emissions.

The company has raised prior backing from Khosla Ventures, BlackRock, Sigma Partners and several other investors. In November 2018, View announced a $1.1 billion investment from the SoftBank Vision Fund, raising their total funding to over $1.8 billion and elevating them well into the ranks of “unicorn” status.

Ecobee

Founded in 2007, Toronto-based Ecobee, best known for its smart thermostat products expanded its product portfolio this year to offer the Ecobee Haven, a smart home monitoring platform, security cameras and sensor for doors and windows. Ecobee also provides SmartBuildings, a subscription-based thermostat management software for commercial and multi-family buildings.

In October 2020, Ecobee was reported to be looking to go public via a merger with a Canaccord blank-check company, according to Bloomberg. A deal could reportedly value the combined company at $490 million, including debt.

Total funding for Ecobee amounts to over $155 million USD to date, backed by investors including Amazon Alexa Fund, Energy Impact Partners, Carrier and Export Development Bank of Canada.

This alternative IPO approach may provide more exit opportunities for companies in the smart buildings space.

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